P ERALTA C OMMUNITY C OLLEGE D ISTRICT
A UDIT AND F INANCE C OMMITTEE M EETING
M INUTES
Date:
Location:
January 18, 2007
Chancellor’s Conference Room, District Office
Start time: 4:10 p.m.
End time: 5:10 p.m.
PRESENT: Bill Withrow, Chair
William Riley, Trustee
Thomas Smith, Vice Chancellor, Finance & Administration
Gail Waiters, Inspector General
Joseph Bielanski, District Academic Senate, Berkeley City College
ABSENT: Elihu Harris, Chancellor
Abel Guillen, Trustee
AGENDA:
 Review and approve the agenda.
 Review and approve the minutes of the October 10, 2006 meeting.
 Presentation by the Inspector General
 Discuss use of independent contractors to conduct random, spot audits
 Status and timeline for the external audit.
 Enrollment and current financial status.
 Discuss alternatives for implementing an asset control mechanism throughout the Peralta colleges
 Discussion of timing and process for Board approval of each of the College budgets
 Status of Budgets:
 College of Alameda
 Berkeley City College
 Merritt College
 Laney College
 OPEB Investment Report (added by VC Smith)
Chair Withrow opened the meeting at 4:10 p.m. VC Smith added the OPEB Investment report to the agenda and indicated that this report should be a standing report.
External Audit (Smith)
External audit will begin next week (January 22, 2007) and the week after if needed. Heidi
White will be here on January 31 and February 1, 2007. Chair Withrow would like to meet with her. A draft of the audit will be presented to the Audit & Finance Committee on February
22, and to the Board (final audit report and audit comments) on March 13, 2007.
Enrollment Status (Smith)
VC Smith distributed the current enrollment information. The first page is a summary of where Peralta is today. With estimate of census day equation expect 7,698 FTEs which means we need 302 FTEs to return to 18,800 FTEs. VC Smith indicated that management is developing a District-wide strategy to get those 302 FTEs. If we could pay off over next few
January 18, 2007 Page 1 of 3

years it would be good conclusion to this. When considering the FTEs, we need to compare the number of sections from last year to this year. There are fewer sections than in previous years.
There is overspending at Laney, slight overspending at COA and Berkeley, Merritt remains flat.
Chair Withrow questioned how this converts to dollars. VC Smith can calculate what is overspent, i.e., 47 additional sections at Laney would be $200,000; spending more this year that last year. The District is paying $1.00 to get $.50. Chair Withrow believes a program was to be implemented this Spring that would look at the curriculum at various colleges. VC Smith thought this would be done by January, but they have not been meeting. Joseph Bielanski indicated that the Chair of the committee, President Cervantes, has not called a meeting. The
Chancellor had considered this an ongoing process for Spring.
Trustee Riley asked if Peralta is offering classes every day from morning through evening, including Fridays. The District is offering classes all day, plus night classes and weekend classes, both Saturday and Sunday. It was suggested that Peralta look at offering services to these students, i.e., vending machines. This can be a problem during weekend college, when there are no services available to the students. Chabot and Ohlone both have services available.
VC Smith added that the Marketing and Advertising for Spring was very good. People have been commenting positively about the advertising.
Chair Withrow suggested that we need to look at enrollment that encompasses all four campuses, so that if a class is full or not offered at a particular campus, the student can be registered at another college.
Financial Status (Smith)
VC Smith indicated the system is operating but PeopleSoft can not post Payroll to ledger and is currently in testing stage.
Chair Withrow inquired as to whether other colleges are having the same problems. VC Smith responded that there were problems with PeopleSoft in beginning but the differences are the complexity in the payroll systems.
Chair Withrow questioned whether there were any other expenses that were higher than anticipated. VC Smith responded with the Chancellor’s office. No money in budget to the extent that it is being spent. Costs from this budget include MIG, Minh Le, Student life funds,
Odell Johnson’s contract. At Berkeley there are some additional costs for security and fire contracts. Some costs under lease, such as maintenance and custodial, need to be paid for by
Peralta due to the 50% law. The District is not overspending except in adjunct faculty.
Chair Withrow was concerned about how these costs would be covered. VC Smith stated they would be covered with one time monies he has not allocated, so far $1.5M to PFT and some has been used for Chancellor’s projects. He has not allocated all of the equalization money yet. VC
Smith said Peralta will be in good financial condition, but he would like to build up reserves if enrollment goes down.
Chair Withrow questioned that since student tuition went down, would an equal amount be cut. VC Smith indicated that it is program based funding and that lowering tuition does not take money away from Peralta. It does take one part of three part component away (the three components are: Apportionment, Property taxes and Fees). We are going from program based funding to equalization. It is just FTE based now.
January 18, 2007 Page 2 of 3

Asset Control Mechanism throughout Peralta Colleges
VC Smith working with Sadiq Ikharo and John Banisadr to look at software program that can place furniture, computers, et al in room. General Services is developing a form to allocate
Measure A expenditures and Karen Ulrich, Employee Relations, is developing an exit interview form of items which need to be returned when employees leave. Should be in effect soon, looking at software right now.
Timing and Process for Board Approval of each of the College Budgets
VC Smith distributed a “Budget Development Calendar” for the current calendar year. For next
FY, COLA is set at 4.04% and Growth 2%. There is one time money of $9M. There is also $9M available for the nursing program (expansion, not operation), and $1.3M surplus basic skills money to matriculation funds for student counseling. There should be a 6.47% increase in next year’s budget over this year’s budget. VC Smith stated there is one problem with assumption by Schwarzenegger for next year’s budget and that is he is expecting a growth in property taxes so he can say he was not cutting the college budgets. There is no promise of back fill if he does not get the property tax money. If property taxes do not go that high, then the colleges are looking for them to add backfill.
Chair Withrow asked if the colleges have money in their budgets, which they don’t need, will they just spend it any way they can? VC Smith indicated that there is no discretionary fund.
Trustee Riley indicated for more efficient shop that the money should be spent by April. VC
Smith indicated that the colleges are pretty efficient at spending. They do not have enough money to spend randomly. 87% of the budget is salary and benefits.
Status of Individual Budgets
Throughout the campuses the only fund that has overspent is Fund 1351 (Adjunct Faculty).
The District has no control over this budget. Laney has overspent, cutting 30 sections. Merritt will overspend. COA has requested additional funds. We are still at a point that classes can be canceled.
Inspector General Report (Waiters)
The final Whistleblower Policy is in draft form on the website. The quarterly report on the fall quarter has been completed. As far as A) independent contractors, one investigation has been completed and will move through the process with the General Counsel and Closed session. IG
Waiters distributed the Fall 2006 quarterly report. Trustee Riley to meet with IG Waiters on international program.
Next Meeting
The next Audit and Finance Committee meeting will be February 22 nd from 4:00 p.m. to 6:00 p.m. in the Chancellor’s Conference Room.
Agenda items include:
1.
Mark Harris, from the Pineapple Group, will present the annual report on OPEB
Investments.
2.
Heidi White, lead auditor, will present the “draft” Audit report. Trustees will receive the draft report four days before the meeting (Monday, January 19). The audit report will be presented to the Board in final form on March 13, 2007.
January 18, 2007 Page 3 of 3